Energy Wholesale Market Review, 4 September 2020

• Day-ahead power fell 9.0% to £43.00/MWh, as wind output picked up towards the end of the week.
• October 20 power climbed 1.8% to £44.28/MWh and November 20 power increased 6.3% to £54.91/MWh.

• Q420 power moved 2.0% higher to £50.00/MWh.
• The annual October 20 contract lost 0.3% to £47.62/MWh, which was just 4.0% lower than the same time last year (£49.6/MWh) following several months of resurging prices.

Forward curve comparison

Annual October Contract

• Day-ahead peak power was up 2.1% to £48.00/MWh, despite a fall in its baseload counterpart amid colder weather and tighter forecast supply margins over peak periods.
• October 20 peak power gained 3.4% at £50.32/MWh, but November 20 peak power decreased 1.0% to £62.06/MWh.

• The annual October 20 peak power contract lost 1.7% to £53.8/MWh.
• This is just 4.3% lower than the same time last year (56.22/MWh).

Forward curve comparison

Annual October contract

Seasonal baseload power contracts

Seasonal baseload power curve

• Most seasonal power contracts declined this week, down on average by 1.1%.
• Winter 20 power expanded 0.2% to £51.09/MWh, while summer 21 fell 0.9% to £44.15/MWh.

• Most seasonal peak power contracts boosted this week, up 1.6% on average.
• Winter 20 and summer 21 peak power increased 2.1% and 1.3% respectively, falling to £59.23/MWh and £48.37/MWh.

Oil and Coal

Carbon

• Brent crude oil prices remained relatively unchanged this week, falling slightly to average $44.97/bl.
• Prices have now stabilised following recent spikes at a near five-month high.
• The news this week concerning Hurricane Laura weighed on prices amid fears of production disruption.
• Early reports indicate that the threat of extensive damage from Hurricane Laura was avoided as the hurricane was downgraded from a Category 4 to a tropical storm.

• API 2 coal prices rose 4.6% this week to average $57.06/t.
• Following recent gains, EU ETS prices rose a further 1.6% to average €28.56/t this week.
• The market experienced mixed movements and volatility this week, with EUA’s briefly lifting above €29/t on 3 September.
• The carbon price held onto these gains for the remainder of the week supported further by prices lifting comfortably over €28/t following the biggest auction in a five week period.

Wholesale price snapshot